Microsoft Corporation Cuts Losses by Selling Map Tech to Uber and Display Ad Business to AOL

Microsoft Corporation has decided to cut its loss-making online businesses, as it has sold Bing’s Mapping technology to Uber, the app-based car service, and its display ad business to AOL. The company declared this Monday, June 29, in an effort to concentrate more on its operations that are doing well. The sale of these two businesses by Microsoft Corporation could mean that the company will stop generating maps, and is instead planning to display maps on its Windows devices. The sale of its display ad business hints that the company would be targeting its Bing search engine, and invest more in its search advertising.

The good news for the hundreds of employees working for Microsoft Corporation’s display ad business all over the world is that there would be no layoffs. It has been confirmed by the company that all the employees would be given an opportunity to transfer to AOL. CEO Satya Nadella has said that the company expects its search engine Bing to turn profitable by next fiscal year. The largest software company in the world does not share its earnings and results for any of its online operations mainly its web portal, MSN and Bing. Microsoft Corporation has reportedly made a loss of more than $10 billion over the last five years in its online operations.

In a statement, Microsoft Corporation’s spokesperson said that the news is proof that the company is increasing its focus on its strengths and core businesses. The spokesperson further explained that it would mean that the company would be focussing more on its divisions that deal with search, search advertising, consumer services and content building.

AOL, which has now been bought by Verizon Communications, would sell display ads on MSN, Skype, Xbox, Outlook.com, and in certain apps in all the major countries around the world under a 10-year deal. Bing will become the default search engine for all web searches on AOL from next year onwards as part of the deal. Microsoft Corporation has decided to cut losses by selling Bing’s Mapping technology to Uber, and its display ad business to AOL.

The company has also extended its existing deal with AppNexus in a multi-year deal. This deal provides the tech platform for all buyers, enabling them to purchase online ads. The company has not disclosed the financial terms of its deal with Uber. The leading app-based car service also declined to reveal any financial details of the deal. As per the deal, Microsoft Corporation has sold a part of its mapping unit, which works on map data processing and imagery acquisition to Uber. It has been reported that Uber would be offering jobs to close to 100 employees of Microsoft Corporation that presently work in these divisions.

Uber is growing at a rapid pace all over the world and is shaking up the traditional cab services. It has been reported that Uber would start providing its services in Las Vegas, Nevada from Labor Day, September 7, 2015. It presently uses a combination of mapping services from Apple Inc, Google Inc and Baidu from China, and will continue to use these services. Microsoft Corporation said that it would continue to work with imagery providers for underlying data on its maps.

However, as mentioned, it will no longer collect mapping imagery as it gets most of its mapping data from Nokia, which was acquired by the company in April 2014. Though its deal with Nokia did not prove to be as fruitful as predicted by market analysts, the company has been looking at Blackberry Limited for a complete buyout. Microsoft Corporation has decided to cut losses by selling Bing’s Mapping technology to Uber, and its display ad business to AOL.

By Ankur Sinha

Sources:
The New York Times-AOL in Deal With Microsoft to Take Over Display Ad Business
Tech Crunch-Uber Acquires Part Of Bing’s Mapping Assets, Will Absorb Around 100 Microsoft Employees
IBN-Microsoft sells display ad business to AOL, map tech to Uber